Markets drop on house news and rate hike in July, Tesla rises
Wall Street's major indexes tumbled Tuesday as higher-than-expected housing data sparked fears of further interest rate hikes by the US Federal Reserve, while Tesla stock rose after Rivian agreed to adopt its charging standard. fees.
Single-family home construction in the US rose in May to its highest level in more than a year, and permits for future construction rose as well, suggesting that the housing market may be changing.
“We have seen new home builds and building permits coming in much stronger than expected, and it looks like the economy remains stronger than expected despite all the calls for a potential recession,” said Sam Stovall, chief investment strategist at CFRA Research.
Tesla added 2% after Reuters reported that Rivian Automotive had agreed to adopt Tesla's charging standard, adding momentum to the EV giant's push to set an industry standard.
Eight of the 11 sectors of the S&P 500 were in the red, with the SPN energy index leading the decline. The S5REAS real estate sector fell 1.4%.
US markets closed lower on Friday as comments from Fed officials dampened optimism that the central bank is nearing the end of its aggressive rate hike.
Traders now see a 72 percent chance that the Fed will raise its key benchmark rates by 25 basis points in July, according to CMEGroup's Fedwatch Tool.
Investors will be waiting for Fed Vice Chairman Michael Barr's comments later in the day and Fed Chairman Jerome Powell's semi-annual monetary policy testimony to the US House Financial Affairs Committee on Wednesday.
PayPal Holding rose 1.7% after KKR & Co. agreed to purchase payments firm loans on a buy-now-pay-later basis of up to 40 billion euros ($43.71 billion) in Europe.
Nike fell 3% after Morgan Stanley noted the risk of lower margins due to excess inventory.
US-listed shares of Chinese companies including Alibaba Group, JD and PDD Holdings fell 3-7% as China cut its benchmark lending rates less than expected. Alibaba Group also said that Daniel Zhang will step down as CEO and Chairman to focus on the company's cloud division.
The Dow Jones Industrial Average fell 228.00 points, or 0.66%, to 34,071.12 points, the S&P 500 fell 22.41 points, or 0.51%, to 4387.18 points, and The Nasdaq Composite fell 40.51 points, or 0.30%, to 13,649.06.
Adobe Inc fell 1.8% after reports that European antitrust regulators are preparing to investigate the firm's deal to buy cloud-based design platform Figma.
Dice Therapeutics Inc jumped 37.6% following Eli Lilly and Co and said it would buy the drug maker for cash for about $2.4 billion.
Falling stocks outperformed rising stocks by 2.43 to 1 on the NYSE and 1.82 to 1 on the Nasdaq.
The S&P recorded 11 new 52-week highs and no new lows, while the Nasdaq recorded 38 new highs and 40 new lows.